Free Minds & Free Markets

A visit to Alberta’s energy future

Fort McMurray, Alberta—Standing on the edge of
the immense and spectacular pit of an oil sands mine for the
first time, I was surprised by a sense of exhilaration. Later,
seven stories up, equipped with earplugs and clad in bright blue
overalls, I marveled at the cascades of black bitumen froth
bubbling over the sides of a separation cell like a giant witch’s
cauldron. The scale of the enterprise and the sheer ingenuity
involved in wresting value and sustenance from the hands of a
stingy Mother Nature provoked in me a feeling close to glory.

Yet as I stood at the edge of the mine, I understood that lots
of people viewing the same sight would be horrified by it—and
outraged by my enthusiasm for it. They would, instead, see the pit
as a deep wound in the earth, amounting almost to a
desecration.

Can I explain myself to those who see mining oil sands as a
moral offense? I plead humanism. Modern capitalism and the
technology it engenders has lifted a significant proportion of
humanity out of our natural state of abject poverty for the
first time in history. Even now, depending on the cycles of nature
to renew supplies of fuel (in the form of wood and
manure) means poverty, disease, and early death for
millions.

So how did I happen to be standing at the edge of the Millennium
oil sands mine in Alberta, Canada, this summer? I was on a
propaganda trip with other journalists and bloggers paid for by the
American Petroleum Institute, the largest oil and natural gas lobby
in Washington, D.C.

The goal of the trip was to sell us on the importance of the
Keystone XL pipeline, which would transport synthetic oil produced
from Canadian oil sands to U.S. Gulf Coast refineries. When
completed, the pipeline could transport 1.3 million barrels of oil
per day. Environmentalist groups like the Natural Resources Defense
Council (NRDC) not only oppose the oil sands production
because of the greenhouse gas emissions, but also assert “the oil
industry is transforming one of the world’s last remaining intact
ecosystems into America’s gas tank.”

A 2010 well-to-wheels study by the consultancy IHS Cambridge
Energy Research Associates calculated that with regard to
greenhouse gas emissions, the “average oil sands import is about 6
percent higher than that of the average crude oil consumed in the
United States.” A 2010 report from the Royal Society of Canada
notes that other studies have found that producing oil from oil
sands results in greenhouse gas emissions that average 10 to 20
percent higher than conventional oil. Oil sands emissions currently
account for 6.5 percent of Canada’s emissions and 0.15 percent of
global emissions. However, recent reports suggest that these
emissions will triple by 2020. This is something to take into
account when considering trade-offs between energy security and
climate change.

The pipeline would almost certainly be a major economic boon,
however. Studies project the creation of as many as 600,000 jobs
and a $775 billion boost to the U.S. gross national product by 2035
as a result of importing Canadian oil.

The Keystone XL project has already been delayed for three
years. The U.S. State Department now says that a final decision
will be reached on the pipeline by the end of the year. TransCanada
Pipeline Vice President Robert Jones declared that the pipeline is
“shovel ready” and construction would involve hiring as many as
10,000 Americans immediately, with up to 34,000 by 2014. Alberta’s
Minister of Energy Ronald Liepert, who was present on my tour,
dryly commented that in June Alberta (population 3.7 million)
created 22,000 new jobs, compared to just 18,000 for the entire
U.S.

The NRDC and other environmental lobbyists are right that mining
oil sands does mean ripping up some boreal forest. Let’s put that
in context: Canada’s boreal forest covers 2.2 million square miles,
an area that is about 60 percent of the size of the entire United
States. So far oil sands production has disturbed about 410 square
miles of that territory. For comparison, the Chicago metropolitan
area covers about 10,000 square miles.

Only 20 percent of Alberta’s oil sands are shallow enough to
mine, which means that the other 80 percent must be recovered by
other technologies. Just 50 miles from the open Millennium oil
sands pit is another facility, this one a joint project of
Conoco-Phillips and Total, which extracts oil using steam-assisted
gravity drainage (SAGD). Horizontal drilling creates two parallel
wells, one on top of the other exactly three meters apart. The well
pairs can extend to about a kilometer. Once completed, operators
inject high-pressure 500 degree Fahrenheit steam produced by four
enormous natural gas-fired steam generators into the top wells.
This melts the bitumen causing a mixture of bitumen and water to
drain into the bottom pipe from which it is then pumped to the
plant. The SAGD process recovers about 60 percent of the resource
in the ground.

Thanks to horizontal drilling, the wells occupy about 13 acres
and drain bitumen from the surrounding 250 acres. The wells will
operate for between and 8 and 15 years. The facility I visited
currently produces 23,000 barrels of bitumen per day, but
ConocoPhillips plans to up that production to 136,000 barrels by
2015. The company estimates that it could produce as much as
500,000 barrels per day by 2040.

In contrast with the magnificent roiling mine, the SAGD facility
was clean and orderly, almost shockingly so—not even stray bits of
paper or oil smudges anywhere. Asked about the lack of visible oil,
a clearly proud ConocoPhillips employee responded that seeing oil
would mean that something is wrong; it’s supposed to stay in the
tanks and the pipelines.

The footprint of SAGD operations typically occupies only 5
percent of the land from which oil is being recovered, leaving most
of the forests undisturbed. Perhaps for this reason, anti–oil
sands activists who eagerly highlight photos of vast oil sands
mining pits like the one I found so striking don’t tend to show
photos of SAGD facilities. The tidy, compact facilities are
unlikely to provoke the horror—or the exultation—inspired by the
open mine pits.

Ronald Bailey
isreason's science correspondent. His
book Liberation Biology: The Scientific and Moral Case for the
Biotech Revolution is available from Prometheus Books.

Disclosure: My travel expenses to visit Alberta's oil sands
were covered by the American Petroleum Institute. The API did not
ask for nor does it have any editorial control over my reporting of
this trip.